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Let me acknowledge the traditional owners of the land on which I join you from, the Wadawurrung people of south western Victoria which includes Geelong, and pay my respects to their elders past and present.
Thank you Chris, and thanks for giving me this opportunity to speak with the Dialogue today.
Last month we commemorated the 20th anniversary of the September 11 attacks on the United States. For most of the time since then I have believed that this would be the most significant event we would all live through.
And yet the last 18 months has eclipsed this. The COVID-19 pandemic is totally reshaping the world. We are all experiencing the ways in which it has completely transformed our lives. It is also transforming the way the world does business.
Existing and profitable business models have had a line put through them with the stroke of a pen. We have all had to adjust our lives to lockdown. Predictability has been obliterated. And we are now finding ourselves having debates around issues such as mandatory vaccination which 18 months ago we could not possibly have conceived.
We have seen Governments take action that has been unimaginable in our lifetime. In turn this has opened up new possibilities for the way Government can act in the future. And so, in the process, as we emerge from COVID-19, we are afforded the most significant moment to re imagine Australia since the end of the Second World War.
Since becoming the Shadow Minister for Small Business I’ve had the opportunity to meet small business owners across the country, primarily through the joy of Zoom. (I must confess that as 2020 began I had no idea what Zoom actually was!) Whether they are on the Gold Coast, South Coast, Western Brisbane or Western Sydney the message has been the same: dealing with COVID has been the hardest experience the 2.5 million small businesses in Australia have ever faced.
What started as a strange, frightening moment for the country in March 2020 when we put normal on pause, is still having a profound effect on the way we go about life today, 18 months on.
And make no mistake, small business has been on the front line of the economic impact of the pandemic.
The stats paint a stark picture –
- Business revenue has fallen since the beginning of the pandemic. In July 2020, almost half of all small businesses reported losses. In June 2021 a quarter of businesses did.
- In the first six months of the pandemic, small business profits fell by $11.2 billion: $5 billion across construction, a $3.5 billion fall in accommodation and food services.
- Employment fell by 101,000 people in the first six months of the pandemic: again 27,000 fewer in construction and 53,000 fewer in accommodation and food services – a drop of one third of the workforce in hospitality.
- The most recently released ABS jobs data shows the pain is continuing with small businesses being disproportionately hit by the pandemic as payroll jobs fell by over 7.1 per cent in the month of August.
- And now we have a skills crisis, with over a quarter of small businesses reporting they do not have enough trained and qualified staff.
Behind each of those stats is someone who has poured their life’s dreams into their small business, whether it is a café; or being a personal trainer, hairdresser or butcher.
I have spoken with a restaurant owner in Waurn Ponds who has lost $30,000 every time a lockdown has been imposed in the lead-up to a weekend.
I’ve spoken with retail operators in Sydney’s south-west who are petrified about how to implement mandatory vaccination rules in the absence of any direction from the Commonwealth Government.
Tourism operators from travel agents to private zoos have spoken of the anguish involved in standing down staff who have been with them for almost the entirety of their working lives. And faced with no real sense of when normal tourism might return, and their life savings tied up in their business, there is a deep anxiety about whether they will make it to the other side.
I think we are all starting to realise that there is a mental health cost associated with the pandemic which is currently being paid in many different parts of our society. In this context we rightly tend to think about kids. But to be sure, there is a significant mental health price being paid by small business operators which we must not ignore.
And I’ve also spoken to an IT business in western Brisbane struggling to find skilled workers, especially around cyber security.
Indeed, in every small business meeting I have attended, the difficulty in finding skilled staff has inevitably been raised. With the closure of the international border meaning there are much fewer people on temporary work visas in the labour market, the impact of removing $3 billion in funding from our TAFE sector has been exposed. We are simply not training enough people. And the truth is that Australia now faces a skills crisis. And this crisis is massively impacting small business.
All these stories are personal and individual. But at their heart is a sense of threat to all that has been achieved through people’s drive and determination. The impact of COVID-19 challenges the aspiration which sparked the creation of their businesses.
And yet for all the difficulties that have been described to me, I’ve also seen that these same qualities: determination, drive and aspiration are ultimately undiminished. And they will surely be what fuels both these businesses’ and the nation’s recovery.
As the pandemic has rolled on, we’ve gone from being on a unity ticket – national solidarity – to a lot of people struggling to hold on, with uncertainty in the face of prolonged lockdowns.
In the face of this, business needs certainty and leadership. Sadly, the Federal Government has offered little of either.
Scott Morrison and his Government have spent most of the pandemic picking fights with the states rather than working cooperatively to solve the problem of how we re-open safely and what life looks like on the other side of COVID.
The Commonwealth Government has abandoned what it means to lead the Federation, instead leaving it to states to try and chart their own way through the pandemic.
From the very beginning, Scott Morrison failed to see the very nature of the pandemic and what was called for from the Commonwealth Government.
Early last year, Labor called for the need to have a wage subsidy which would keep workers connected with their employers as the country first moved into lockdown. At the time, Scott Morrison said that such a wage subsidy would be dangerous. Within days we witnessed queues at Centrelink offices not seen since the Great Depression. And shortly after, the Prime Minister changed his tune and supported Labor’s call for a wage subsidy in the form of JobKeeper.
Rather than leading events Scott Morrison was reacting to them. And this has been the pattern ever since.
JobKeeper was fundamental to people staying connected to their workplaces. It provided the certainty throughout 2020 that was needed to keep small businesses across the country in business.
In March of this year JobKeeper came to an end. At the time Scott Morrison and Josh Frydenberg were in the middle of framing the Federal Budget. That Budget contained an assumption that throughout this year Australia’s major cities would experience COVID outbreaks and as a consequence lockdowns. And yet despite knowing this, when JobKeeper came to an end, nothing was announced in its place to provide support to businesses when those lockdowns occurred.
The result throughout this year has been policy on the run when it comes to providing business support: piecemeal reactive measures with no national plan.
The lack of policy coherence has seen significant holes in the support that has been provided. For example, many businesses which have seen significant declines in their revenue have not qualified for support because they are not in a declared hotspot. And with no connection being provided between businesses and their employees, the most recent monthly employment figures were as bad as any in the entire pandemic.
In the latest reaction to events last week Scott Morrison announced that the government would be winding back the support to small businesses which has been put in place. This followed confirmation that the COVID disaster payment would also come to an end in coming weeks.
In Parramatta, one in five local workers have been relying on the COVID-19 disaster payment. And we know that of those self-employed business owners, in August this year, there were 139,000 which were on zero hours and could have been accessing the COVID disaster payment.
Despite businesses and their employees needing help, with lockdowns still in force and a post-COVID normality still seemingly a long way off, Scott Morrison is racing to end support. The lessons of March have not been learnt.
Yes, we can’t keep spending forever, but we need to make sure that the withdrawal of support matches the changes in current conditions.
At 80 per cent vaccination rates, we will not have completed the journey to the other side of COVID. Hospitality density limits, challenging for restaurants and pubs, will still be in place. The international border will not be properly open and so travel restrictions will continue to impact businesses relying on tourists.
What is desperately needed from the Commonwealth Government is direction and leadership. We need to hear from our Prime Minister a proper explanation of what the nation faces, what the game plan is to deal with it, and what the end game looks like on the other side. All of us can understand that specifics as to what restrictions will be lifted on what date are hard to provide. But at the very least, and from the very beginning, Scott Morrison should have been able to articulate in a constant voice and with a consistent tone what it is that he has been trying to do. This alone would have provided small business with a critical sense of predicability which has been missing from day one.
Yet, instead of looking for ways to help small businesses survive, the Government has been playing politics, wasting its time running scare campaigns.
The latest of these has been to peddle the untruth that Labor intends to make businesses, including small businesses, repay JobKeeper. This is a complete lie. Let me be unequivocally clear. Labor will not require any business to repay a single cent of JobKeeper. Let me repeat that. Labor will not require any business to repay a single cent of JobKeeper.
Labor wants to redefine our relationship with small business. As we see it, the relationship between Labor and small business should be very natural.
Deep in our roots, Labor has always been about aspiration. From the earliest moments in our history in the late19th Century our mission was to improve the lives of working people, to support their aspirations to lead a more prosperous life. As the party of migrant Australia, we have been about supporting people who have made the momentous decision, to shift their lives to a new place on the other side of the world, to build the life for which they aspired for themselves and their kids. And as the party of Hawke and Keating, in modernising the Australian economy in the 80’s and 90’s, we helped build the nation’s aspirational middle class.
Labor stands for what small businesses are trying to do – with aspiration, determination and drive, and without handouts – build something.
But as a party sometimes we haven’t been as loud, or our message hasn’t been clear enough in our support for small business. This is despite the fact that our initiatives in government led the way in many of the most important reforms enjoyed by small businesses today. It was Labor’s Brendan O’Connor, Minister for Small Business in the Gillard Government, who first introduced instant asset write off back in 2011 and the notion of loss carry back. Both ideas have been critical in providing thousands of small businesses across the country with much needed tax relief and cash flow.
After our defeat in the 2019 election, Labor undertook an extensive review of the election to make sure we learnt our lessons and heard the message that was being delivered to us by the Australian people. The review made clear that without knowing it we had found ourselves talking to a far too narrow slice of the Australian people. As a party of government, we needed to lift our eyes and speak to the broad mass of people from whom we sought to draw support. This must include small business.
While Labor’s roots lie in the trade union movement – and working people and trade unions will always be central to our mission – representing the interests of small business is entirely consistent with building a fair country which serves the interests of Australia’s middle class. And for other social democratic parties around the world, small business is seen as heartland.
The best example of this is the most successful social democratic party in the world: the US Democrats.
For the Democrats, small business is part of their DNA. Their founder, Thomas Jefferson, spoke in 1785 of farmers, the small businesses of the time, in the following terms:
Cultivators of the earth are the most valuable citizens. They are the most vigorous, the most independent, the most virtuous, and they are tied to their country and wedded to its liberty and interests by the most lasting bands.
In more recent times, President Harry Truman said in 1950:
I have often stressed the key role that small and independent business must play in providing jobs, in promoting the vigorous competition necessary for the future growth of our economy, and in preserving our economic and political freedoms.
What comes through in both statements, separated by the better part of two centuries, is a sense of not only the importance of small business in economic terms but also the importance of small business to society and to democracy.
This resonates loudly for me. In my hometown of Geelong, small businesses are central to the community. They are often the sponsors of community sport. They are often places of community gathering: coffee shops, post offices, newsagents. And every one of them has a business model which is based upon a deep connection with community. And community has always been at the heart of what it has meant for me to be Labor.
Labor is also a social Democratic Party. And the intuitive way the US Democrats relate to small business shows that it is possible for Labor as well.
All of this may seem very esoteric and more appropriate to a lecture on political philosophy. But the point I really want to make is that we are serious. We are serious about our to desire to see small business as a core constituency. We are serious about our intent to orientate ourselves toward the interests of small business. And we are deadly serious in our determination to contest the small business vote.
And all of that has to be good news for small business. Because while small business operators themselves will make their own choices about who to vote for, at least having both parties of government hotly competing for your vote must lead to better policy outcomes for small business. It also means that the Liberal Party cannot keep taking you for granted.
We are also acutely aware that it is not enough to say we want small business to vote for us and that somehow this will magically happen. We need to listen. We need to hear from small business about their issues and what measures could be put in place which would make a difference to their lives. We need to give small business a reason to vote for Labor and we will do all that.
Because I want to be very clear. Labor means to be the party that stands for small business.
We will have more to say about how we support small business closer to the election.
But we do want to look at ways we can remove the administrative burden placed upon small business by government so that you can focus on the passion that had you start a small business in the first place.
We want to make sure that the rules of the road in our economy are fair for small business so that, for example, you are paid on time.
We want to look at ways we can help small business use the very best technology that is available. We want to help them turn science into jobs. That’s why Labor has announced the $15 billion National Reconstruction Fund to invest in diversifying the high-tech products that Australia makes onshore.
And we also want to make it easier for families to juggle work and home life, with our affordable childcare policy.
We know the pandemic won’t last forever, there is a way through this.
But we need to make sure our small businesses are also making it through.
Businesses deserve a government that value them, and make it easier, not harder for them to succeed.
COVID has been a massive re-set for the world. We need to come out of it smarter, with a positive plan for this country’s prosperity.
And now is the opportunity to develop a solid economic plan that will see Australia thrive into the middle of this century so that our kids and grandkids can have the same prosperity that we have enjoyed.
And to do that we need a government that will stand with those, who through their own ability, pursue the dream of building their own small business; a government that supports their aspiration.
And that is exactly what an Albanese Labor Government will be.